LogFAQs > #943410308

And note that this problem can be mostly solved with just a small amount of diversification. For instance, instead of putting all our money in the 10x gain/90% loss trade, let's allocate 50% to a 5x gain/90% loss trade, and the other 50% to another 5x gain/90% loss trade. EV is cut in half, but it's still insanely profitable. And now you are overwhelmingly likely to make money over a period of 10 years. The math is a bit harder to run as a back of the envelope calculation than I was thinking, but I'm pretty sure the conclusion is that the median result here turns you into one of the richest people on Earth (compared with zero gain in the other one). In the success universes, you go from owning multiple galaxy superclusters to owning a handful of planets.

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September 1, 2003; November 4, 2007; September 2, 2013
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